2026 PLP (Trib (PTD)

DR. SHAH KHAN, MEMBER.

The above titled appeal has been filed by the appellant registered person against the order dated 24.07.2020 passed by Learned Commissioner Inland Revenue, RTO, Peshawar, whereby application for refund claim of the appellant registered person was rejected in following manner;

4. In order to meet the norms of justice, this office afforded two opportunities for explaining each and every day of default in submission of your refund claim but you failed to satisfy the competent authority, therefore, your application for condonation of time limit is hereby rejected under Rule-28 of the Sales Tax Rules, 2006 read with apex court's order in the case as reported Commissioner Sales Tax, Zone A, Lahore v. Chenab Textile Mills Ltd. Mutton Road Lahore (1985 PTCL 205)."

2. This appeal was fixed for hearing on 16.04.2025. On due date, Mr. Muhammad Azam, Advocate/AR appeared on behalf of the appellant registered person and argued his case, while Mr. Ishfaq Ahmed, DR appeared to represent the Tax Department and defended the order passed by learned CIR, RTO, Peshawar.

3. Arguing on the grounds of the appeal, the learned AR of the appellant contended that the impugned order passed by the L/CIR dated 24.07.2020 is against facts and law due to the following: (i) The appellant makes sales of its own products, that is, tea and spices in retail packing in which retail price and sales tax are separately mentioned under SRO.165(I)/2010 dated 10.03.2010. (ii) The appellant provided all documents and record in support of the claim of sales tax refund of Rs.8, 112,052 claimed in the monthly sales tax return for June, 2013 but the claim of refund was not decided or rejected on the basis of record but on the basis of delay in filing the refund application. (iii) The learned CIR ignored the principle settled by the honorable Supreme Court in the case of Messrs Pfizer Laboratories to the effect that' a refund claim could not be declined on the ground of limitation and that no person shall be deprived of his property save in accordance with law . (iv) The order of the CIR dated 24.07.2020 is barred time limitation because the refund application was filed on 30.12.2013 for sales tax under serial No.10 of the SRO.165(I)/2010 dated 10.03.2070 while the CIR has passed the order on 24.07.2020 beyond the prescribed time period. (v) The appellant knocked the doors of the honorable FTO two times but the department avoided to implement its recommendations without any cogent reason. Based on the above, the L/AR pleaded for vacation of the impugned order dated 24.07.2020 and issuance of directions to the department for processing of the refund claims on merits.

4. The learned DR on the other hand contended that, apart from the fact that the refund application was filed late than the prescribed period, the appellant also failed to verify its claim by providing record and documents in support of the claim. It was further asserted that since the refund is claimed by the appellant, it is the onus of the appellant to prove through providing of record that it is actually entitled to the refund, that the refund claim is in accordance with law and rules and that the refund of the sales tax paid has not been passed on to the buyers and to the end consumers. Based on the above, the L/DR pleaded for rejection of the appeal.

5. We have heard the arguments of both the learned AR as well as the learned DR and have also gone through the relevant record besides the relevant provisions of law. Upon consideration of the same, the appeal grounds are adjudicated as under:

6. Record transpires that thorough this forum order dated 14.03.2025 in MA (Condonation) No.03/PB/2021 read with STA No.23/PB/2020, we have after detailed discussion on the relevant facts already condoned the delay in filing the refund application late than due date. Resultantly, the claim of refund had to be decided on the basis of facts regarding the claim and compliance with relevant provisions of the sales tax law. Since the refund claim was rejected on technical ground of late filing of refund application, hence the verification about the facts and compliance with relevant provisions of sales tax law have not been adjudicated and explored through a verification process. A decision that is fair and in accordance with the law would require verification of the claim in the light of relevant record justifying the appellant's entitlement to the refund for the period under consideration. We may also clarify that since the appellant claims refund of sales tax paid in excess of the sales tax liability, the onus to prove the correctness of the refund claims, on facts and in law, lies upon the appellant registered person. Complete record is not before us for giving finding of fact nor the impugned order contains any such finding.

7. For what has been discussed supra, the impugned order dated 24-07-2020 is set aside and the matter is remanded back to the concerned CIR for de novo proceedings in accordance with law and affording adequate opportunity to the appellant taxpayer for decision on facts and law, after examining relevant record, evidences and details in support of the claims of refund. The CIR shall decide the matter in accordance with correct facts and provisions of law in the light of record and after making necessary verification from the relevant quarters about the documents and details to be filed by the appellant. The appellant is also directed to associate with the fresh proceedings and provide all relevant record in support of his stance raised before this forum. After examination of the record and reply of the appellant, the CIR shall confront the appellant with the discrepancies in the reply/documents submitted and then pass a speaking order accordingly. The proceedings are to be concluded preferably with 60-days from the receipt of this order by the department.

8. Appeal is accepted to the extent indicated above.

9. This order consists of (04) pages and each page bears my signature. MQ/20/Tax(Trib.) Appeal allowed.